Estate litigation between siblings is, unfortunately, more prevalent than you may know. The cause is straightforward: a parent’s decision to provide more or less of their inheritance to one kid over another can be hurtful during an already difficult time. It is frequently used to assess a parent’s faith in their children, or lack thereof. It may also show how serious a parent is when making commitments to their children.
The consequences of inheritance disputes between siblings cannot be overstated. Not only may such disagreements result in protracted and costly court fights, but they can also inflict lasting harm to families.
Consider the following mitigation methods to help prevent conflict if you anticipate an inheritance dispute with one of your siblings:
Proactivity is the key to sibling disputes
Often, inheritance conflicts arise when siblings disagree over what their parents meant to leave to them following their death. To avoid this, employ an experienced estate planning lawyer who can sit down with your parents/family to go over how they want their estate distributed. The lawyer will discuss various estate planning options, such as whether to form a will or a trust, and how to correctly express certain bequests so that it is obvious who receives what.
Another advantage of estate planning is that it encourages parents to discuss inheritance problems with you and your siblings before their death. This is especially true if your parent wishes to leave a kid out of their will, which is perfectly lawful.
Financial account co-ownership
A will protects property that is exclusively in the parent’s name. Shared property, on the other hand, goes by operation of law to the joint owner upon the death of one of the owners. If your parent wants you to have full ownership of a financial account, he or she may want to explore establishing the account in your and your parent’s joint names. Of course, anyone thinking about planning should only do so after consulting with a lawyer, as joint ownership of an account has risks and may result in unanticipated tax consequences.
Appointing a Personal Representative or Trustee who is impartial
The impression of prejudice or undue influence is the most typical cause of sibling inheritance disputes. If your parent predicts that inheritance conflicts may arise after their death, they may decide to designate a third-party personal representative or trustee (if they establish a trust) who is not connected to individuals who will inherit or benefit from the estate.
Create an Instruction Letter
While a letter of instruction is not binding (an enforceable document), it can be useful in explaining a parent’s desires for how their property should be divided to their children. Writing such a letter may be very useful in communicating how they want their assets handled.
Purchase or Liquidation
If siblings who are in conflict inherit property together, one sibling may buy out the other. However, many siblings cannot afford to do so, particularly if the shared property is big, such as a primary dwelling or vacation home. In that instance, liquidating the property and dividing the money may be the best alternative. However, before selling any big assets, consult a professional to evaluate the tax consequences of the transaction.
The Law Offices of Alice A. Salvo
If you suspect a family inheritance dispute, you should speak with an estate planning attorney about your choices as soon as possible. Call us or fill out the client form when you’re ready to take your estate planning into your own hands. We can determine the best approach to avoid any inheritance disputes in the case of your death or the death of a family member.